Evergreen Freedom Foundation

OLYMPIA, Wash. – About 23 percent of Oregon adults imposed $733 million in new taxes that one analyst said could cost the state up to 80,000 new jobs needed to replace the 130,000 lost in the recession.

A public employee union leader said the new taxes won’t have people and businesses “lining up at the bridge to head north to Washington state.”

But one Vancouver businessman said any individual or business that can move here will unless Gov. Christine Gregoire takes the Oregon vote as a green light to raise taxes.

Gregoire was quoted in The Seattle Times as saying, “The Oregon results should have a major impact on ongoing budget discussions here in Washington state.”

Initiative guru Tim Eyman put distance between the Oregon vote and what might happen in Washington state. He stressed the difference in tax cultures between the two: Oregon has long been an income-tax state, while Washington depends on the sales tax.

“Democrats in the Washington State Legislature are on a kamikaze mission to raise taxes,” he said, “but even they aren’t crazy enough to go against long-standing public opposition in the state to an income tax.”

Measures 66 and 67 won 54 to 46 percent, and 53 to 47 percent a week ago, pushed by almost $7 million in funding primarily from public employee unions. Opponents raised $4.55 million.

The Oregon Secretary of State’s office calculated turnout at more than 61 percent of registered voters. Spokesman Don Hamilton, said the numbers show Oregonians were “interested and engaged.”

“Many states would be very happy with 60 percent plus results in an off-year, state-wide election,” he said. Oregon turnout for the 2008 presidential election was 85.7 percent.

The Secretary of State’s Web site said that of 2.06 million registered voters, 1.26 million cast ballots. According to the U.S. Census Bureau, the 18-year-old and over population of Oregon is about 2.9 million, so about 23 percent of adults approved the taxes.

“Yes for Oregon” outraised and outspent opponents by 50 percent. Public employee unions were the big donors, with the Oregon Education Association topping the list at $2.1 million, Local 503 of the Service Employees International Union at just shy of $1.9 million and Council 75 of the American Federation of State, County and Municipal Employees at just over $1.1 million.

The total war chest for proponents of the measures approached $7 million, while the opponents raised $4.55 million, with some $610,000 of that used to pay for signature gathering.

What will it mean for Oregon? According to Steve Buckstein, a senior policy analyst for the free-market-oriented Cascade Policy Institute, the state will have a harder time coming out of the current recession. An added burden has just been laid on those who create jobs, he said.

Buckstein said Cascade calculated that by 2018, 47,000 to 80,000 new private sector jobs that could have been created once Oregon pulled out of recession are now gone. He said the state lost 130,000 private sector jobs so far.

“We may ship all our productive businesses to your state,” he said, referring to the state of Washington.

As for individuals, Buckstein said the new taxes mean that by 2018 there will be some 80,000 fewer tax filers in Oregon. This will be the result of a combination of high-income individuals who had contemplated relocating to the state but now think otherwise and currently residents who will move out.

Buckstein said given the current economic climate, companies can’t pass the tax hikes on to customers and will have to cut costs through reduced wage increases and possible wage cuts or job losses.

Buckstein’s analysis was contradicted by Ed Hershey, communications director for SEIU Local 503. “The whole job loss notion has been debunked. They’re not lining up at the bridge to head north to Washington state,” he said.

Hershey said the overwhelming consensus among economists in Oregon is the measures will have almost no impact on private sector jobs. He criticized opponents for putting out false hypothetical examples of the impact. “They used a business that wasn’t even in Oregon,” he said.

“For those who believe government has a role as a safety valve, the 66 /67 vote was heartening,” Hershey said.

Across the Columbia River, Vancouver businessman Bruce Holmstrom viewed the vote as a backlash against business. “Oregon businesses didn’t come up with enough information to counter (the measures)” he said.

He said any business that has the ability to pull up stakes and move would contemplate doing it. And the message for businesses in Washington state is pretty clear.

“The Washington business community has to get together and have a frank discussion with the state about our negative business environment,” he said. Boeing sent that message for years, he said, before taking business to other states..

When asked what would happen if something similar passes here, he said it would be another layer of expense passed on to consumers. If they choose not to buy a product – in his case petroleum – then he wouldn’t need as many employees.

One thing the state will not do, however, is try to recruit Oregon businesses to move to Washington. According to Penny Thompson with the Washington State Department of Commerce, there is an un-written understanding among the states not to poach each others businesses.